Mortgage Reduction Plan Frequently Asked Questions
Q. Exactly how does the MRP pay off my loan faster?
A. Most people still pay their mortgages the old, traditional way—every month they make one monthly payment to their lender. The MRP simply changes the way your mortgage is paid by electronically debiting half of your monthly payment from your bank account every two weeks. This bi-weekly collection system automatically adds an extra ½ payment to the loans outstanding principal balance about every 6 months. Using the MRP saves a typical homeowner
tens-of-thousands of dollars in interest and eliminates years off the term of their loan!
Q. There are numerous other bi-weekly programs similar to this, why choose the MRP?
A. At Tower Administrative Services, Inc. (TAS), we have been successfully administering the MRP as well as many other bi-weekly programs since the late 1980’s. We have the experience and longevity that many other bi-weekly programs lack.
Q. Will the Mortgage Reduction Plan work with any mortgage?
A. Yes. The MRP will work with virtually any type of loan, including: Fixed, Adjustable, Balloons, and Jumbos just to name a few. Your lender, interest rate, and escrow all remain the same. The MRP doesn’t change the terms of your mortgage; it just helps you to eliminate unnecessary interest charges.
Q. My mortgage isn’t new, can I still enroll in the program, and will I still save money?
A. Yes, you can enroll in the MRP at any point in the loan, however, the sooner you start, the more you’ll save.
Q. What if my loan is sold, transferred or I decide to refinance--can I still remain in the program?
A. Absolutely. In fact, most loans today are sold on the secondary mortgage market. The MRP is
completely transferable (unlike many lender bi-weekly programs). All you need to do is forward the change information to Tower, and we’ll take care of the rest.
Q. My mortgage is by far my biggest monthly payment-how are my funds safeguarded?
A. Client security is our primary focus. Tower protects your money with numerous “checks and balances”. Funds are held in a federally insured institution. All transfers are in compliance with NACHA guidelines.
We also offer a
free annual audit to protect you from accidental lender miscalculations or misapplied payments. Think this won’t happen to you? Think again. According to U.S. Government statistics, homeowners are being overcharged
billions of dollars per year due to lender mistakes! Our audit will help keep you from becoming part of the statistics. We’re on your side - we make sure that you save the maximum amount of interest possible. It’s
your money—why give any more of it to your lender than you have to?
Q. Why can’t I just pay my lender on a bi-weekly basis?
A. Most lenders won't accept less than a full monthly payment. Some lenders may have their own internal bi-weekly program, however, most of these plans are
not portable. With the MRP, if your loan is sold or refinanced, all you need to do is update us with your change information. We take care of the rest. Your mortgage acceleration program continues uninterrupted.
Q. Why use the Mortgage Reduction Plan if I can just do this myself?
A. This is a good question, but you need to ask yourself some additional questions as well;
1. Do I have the financial self-discipline to make extra principal payments on my own? 2. Will I do so faithfully? 3. Have I ever made any extra payments in the past?
Many of us have good intentions, but fail to follow through, for example: You tell yourself that you’re going to do 100 sit-ups daily, or walk for 5 miles every other day, or even lift weights to lose some weight. Sounds great, but do we stick with it? Most of us probably won't without some kind of assistance, it's just human nature. The same concept applies to prepaying your loan. Statistics show that less than 3% of homeowners who attempt to pay extra principal are successful on their own. Our proven formula of prepayment
guarantees results – we provide all the self-discipline necessary to pre-pay your loan.
